Measuring Tax Compliance among Small and Medium Enterprises in Nigeria

Abstract

This study examined the level of tax compliance among owners of small and medium enterprises (SMEs) in Nigeria. Small business is vital to the economy of Nigeria. The sample size for the research was 250 and 223 SME owners responded through the questionnaire distributed. The quantitative method was used in analyzing the data collected. SPSS was used to analyze the data. Findings showed that female SME owners are more tax compliant than male counterparts. There is a need for tax education among SME owners. There is multiple taxations. Tax amnesty can increase the level of tax compliance.

Why Is Tax Knowledge and Tax Understanding Important?

“…The problem of tax compliance is as old as taxes themselves, especially in developing countries like Indonesia (Besley & Persson, 2014). The result of this study supports previous research conclusion which states that there is the relationship between tax knowledge, tax understanding, and tax compliance both partially and simultaneously (Fallan, 1999;Omagor & Mubiru, 2008;Newman, Charity, & Ongayi, 2018;Kwok & Yip, 2018;Aladejebi, 2018). There is no difference perception between male and female in perceived the importance of tax knowledge and understanding.…”

“…Unfortunately, the increasing number of MSMEs entrepreneurs did not affect the tax contribution (Susyanti, 2014). There are several factors that influences tax compliance including referral groups, the probability of audit, tax knowledge, and the perception of equity and fairness (Inasius, 2018), tax education (Kwok & Yip, 2018;Aladejebi, 2018), political factors, such as lack of transparency due to weak news media, sociological, cultural factors, such as weak national identity (Bessley & Persson, 2014), level of understanding (Adiasa, 2013;Agustiningsih & Isroah, 2016), lack of adequate knowledges (Fallan, 1999;Omagor & Mubiru, 2008;Manual & Xin, 2016;Newman, Charity, & Ongayi, 2018). Susyanti (2014) argues that the lack of tax knowledge and understanding of MSMEs owners is the main detention in fulfilling tax obligations.…”

Tingkat Kesadaran Kepatuhan Pajak: Studi terhadap Badan Usaha Milik Desa

“…Pajak merupakan sumber pendapatan yang besar bagi suatu negara baik itu negara berkembang maupun negara maju (Aladejebi, 2018;AlAdham et al, 2016;Nurkhin et al, 2018;Savitri & Musfialdy, 2016). Adapun penggunaannya untuk membiayai kegiatan seharihari dari negara seperti memberikan pelayanan, membangun fasilitas kesehatan, sekolah, dan umum serta memberikan kepastian aman kepada masyarakat sehingga tercapai kesejahteraan social (Fagariba, 2016;Febriani & Kusmuriyanto, 2015).…”

“…Salah satu sector yang memberikan kontribusi terbesar terhadap pendapatan yang berasal dari pajak adalah usaha kecil dan menengah (UMKM) dimana usaha ini dibentuk oleh sekelompok masyarakat dengan modal yang kecil dengan memanfaatkan sumber daya yang dimiliki dan modal yang kecil. Berdasarkan penelitian yang dilakukan (Aladejebi, 2018;Atawodi & Ojeka, 2012;Daniel & Faustin, 2019;Naicker & Rajaram, 2018) menunjukkan bahwa UMKM sangat penting dalam membangun perekonomian suatu negara dimana memberikan kontribusi yang besar terhadap pendapatan. Disamping itu, UMKM juga berperan penting dalam mengurangi jumlah kemiskinan dalam suatu negara melalui penciptaan lapangan kerja sehingga masyarakat tidak bergantung kepada perusahaan besar (Aribaba et al, 2019;Hamid et al, 2010;Hohenwarter & Ll, n.d.;Naicker & Rajaram, 2018).…”

The Effect of Perception on the Benefits of Tax toward the Discipline of Paying Taxes in Jakarta

“…Tax is a means of equalizing the income of citizens and the source of state development funds for the government. So in the long run the general public can enjoy the effects of this development (Aladejebi, 2018). For example, if you pay highway tax, you will enjoy the benefits of repairing highways in your area.…”